DCIT, Coimbatore V. M/s. Kikani Exports P. Ltd., Coimbatore

ITA 1671/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64565 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 27-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ------- ITA NO.1671/MDS/2012 ASSESSMENT YEAR : 2005-06 THE DY. COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-I(3), COIMBATORE. V. M/S. KIKANI EXPORTS P.LTD. 104, WEST PERIASAMY ROAD, R.S. PURAM, COIMBATORE-641 002. (PAN : AABCK4784H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GURU BASHYAM, JCIT RESPONDENT BY : NONE DATE OF HEARING : 19-1 1-2012 DATE OF PRONOUNCEMENT : 19-11-201 2 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE CIT(APPEALS)-I, COIMBATORE DATED 11-06-2012 FOR THE ASSESSMENT YEAR 2005-06. ITA NO.1671/MDS /2012 2 2. BRIEF FACTS ARE THAT THE ASSESSEE FILED ITS RETU RN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 ON 29-10-200 5 DECLARING TOTAL INCOME OF ` 65,98,993/-. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN COTTON YARN. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 196 1 ('THE ACT' FOR SHORT). AFTER SCRUTINY THE ASSESSING OFFI CER NOTICED THAT THE ASSESSEE HAD INSTALLED A WIND ELECTRIC GEN ERATOR AT THE COST OF ` 1,10,01,181/- AND CLAIMED HIGHER DEPRECIATION OF ` 44,00,475/- @ 40%. ACCORDINGLY, THE ASSESSMENT WAS RE- OPENED U/S 147 BY ISSUING NOTICE U/S 148 OF THE ACT . IN RESPONSE TO THE NOTICE U/S 148 THE ASSESSEE FILED A REPLY STATING THAT THE RETURN FILED U/S 139 ON 29-10-2005 RELATING TO THE ASSESSMENT YEAR 2005-06 SHOULD BE TREATED AS CO MPLIANCE TO THE NOTICE U/S 148. SUBSEQUENTLY, NOTICE U/S 14 3(2) WAS SERVED ON THE ASSESSEE. THE ASSESSING OFFICER WHIL E PASSING THE ASSESSMENT ORDER UNDER SECTION 143(3) DATED 12- 12-2011 HELD THAT SINCE THE ASSESSEE HAD NOT EXERCISED OPTI ON TO CLAIM HIGHER RATE OF DEPRECIATION ON WINDMILL BEFORE THE DUE DATE TO FILE THE RETURN OF INCOME, THE ASSESSEE WAS NOT ENT ITLED FOR HIGHER RATE OF DEPRECIATION. ACCORDINGLY, THE ASSE SSING OFFICER ITA NO.1671/MDS /2012 3 DISALLOWED THE ASSESSEES CLAIM OF HIGHER RATE OF D EPRECIATION ON WINDMILL. 3. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE CIT(APPEALS). BEFORE THE LEARNED CIT(APPEALS) THE A SSESSEE RELIED ON THE DECISION OF THE CO-ORDINATE BENCH OF T HIS TRIBUNAL IN THE CASE OF K.K.S.K. LEATHER PROCESSORS PVT. LTD . V. ITO (130 TTJ (CHENNAI) 184, WHEREIN THE TRIBUNAL HAS HELD T HAT THE ASSESSEE HAD SATISFIED THE REQUIREMENT OF SECOND PR OVISO TO RULE 5(1A) AND, THEREFORE, IT WAS ENTITLED TO DEPRE CIATION ON WIND ELECTRIC GENERATORS AS PER APPENDIX-I. THE AS SESSEE ALSO RELIED ON THE DECISION OF THE CHENNAI D BENCH OF T HE TRIBUNAL IN ITA NO. 1171/MDS/2008 IN THE CASE OF M/S. RANGAM MA STEELS AND MALLEABLE, COIMBATORE V. ACIT. AFTER C ONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LEARNED CIT(AP PEALS) HAS OBSERVED IN HIS ORDER AS UNDER : I HAVE GONE THROUGH THE SUBMISSIONS MADE BY THE APPELLANT AND ALSO THE ORDER OF THE ASSESSING OFFICER, THE WINDMILL WOULD FALL UNDER APPENDIX I O F THE DEPRECIATION RATES PRESCRIBED UNDER RULE 5 UNDER THE GROUP KNOWN AS RENEWABLE ENERGY DEVICES. IT IS A FACT THAT, NO FORM PRESCRIBED IN THE INCOME-TAX ACT FOR INTIMATING THE OPTION TO THE ASSESSING AUTHORITY. THE FACT THAT THE APPELLANT ITA NO.1671/MDS /2012 4 FILED THE RETURN OF INCOME WITHIN THE DUE DATE AS STIPULATED IN THE INCOME-TAX ACT HAS TO BE TAKEN AS UTILIZATION OF THE OPTION BY THE ASSESSEE. RELYING ON THE DECISION OF THE HONBLE INCOME-TAX APPELLATE TRIBUNAL, CHENNAI IN THE CASE OF M/S. KKSK LEATHER PROCESSORS PRIVATE LIMITED AND ALSO IN THE CASE OF M/S. RANGAMMA STEELS AND MALLEABLE, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF THE APPELLANT ON DEPRECIATION OF THE WINDMILL. IN THE RESULT THE APPEAL IS ALLOWED. 4. AGGRIEVED, THE REVENUE HAS FILED THE PRESENT APP EAL BEFORE US. THE LEARNED DR SUBMITTED THAT THE CLAIM MADE IN THE RETURN OF INCOME REGARDING DEPRECIATION OF WIND MILL WOULD NOT AMOUNT TO EXERCISING OPTION AS REQUIRED UNDER T HE SECOND PROVISO TO RULE 5(1A) OF THE INCOME TAX RULES, 1962 . THE LEARNED DR THEREFORE SUBMITTED THAT THE ORDER OF TH E LEARNED CIT(APPEALS) SHOULD BE SET ASIDE AND THAT OF THE OR DER OF THE ASSESSING OFFICER BE RESTORED. 6. WE HAVE HEARD THE LEARNED DR , PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LEARNED CIT(APPEALS) WHILE ALLOWING THE CL AIM OF THE ASSESSEE FOR HIGHER RATE OF DEPRECIATION ON WINDMIL L HAS ITA NO.1671/MDS /2012 5 FOLLOWED THE ORDERS OF THE TRIBUNAL IN THE CASE OF K.K.S.K. LEATHER PROCESSORS PVT. LTD. V. ITO (SUPRA) AND IN THE CASE OF M/S. RANGAMMA STEELS AND MALLEABLE (SUPRA). THE REV ENUE HAS NOT BROUGHT ON RECORD ANY MATERIAL TO SHOW THAT THE DECISIONS OF THE TRIBUNAL, REFERRED TO ABOVE, HAVE EITHER BEEN REVERSED OR MODIFIED BY THE HONBLE HIGH COURT. IN THE CIRCUMSTANCES, WE FIND NO INFIRMITY IN THE ORDER PA SSED BY THE LEARNED CIT(APPEALS) AND THEREFORE THE SAME IS CONF IRMED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON MONDAY, THE 19 TH OF NOVEMBER, 2012, AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) ( V.DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 19 TH NOVEMBER, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE